One of the most important steps in starting a new business is finding and establishing your business's name. You'll be placing that name everywhere—on documents, advertising, contracts, filings with state and federal government agencies, products, services, and, of course, your business tax documents.
It's your identifier, and it separates you from your competitors. But you must take some steps first to make sure you can legitimately use the name and to prevent others from using it.
Types of Business Names
Rules for claiming and registering a business name vary depending on your business structure. Naming some structures requires far less effort than others.
Your easiest option might be to file a "doing business as" (DBA) registration with your state or county clerk if you're a sole proprietor. This indicates that you're operating your enterprise under some name other than your own.
It's not necessary to register your personal name, although you might want to do so if you're varying it in anyway, such as by using "Sue Smith Decorating" instead of simply "Sue Smith."
Banks will require that you file a DBA if you want to open a separate business account for your sole proprietorship.
All other business structures must generally register their names, and you might also want to consider trademarking it at the federal level as well or registering a domain name for your website.
A trademark prohibits anyone else from using your name, even if they're not located in your state. You can also trademark products you've created.
Search Business Name Availability
Your state won't allow you to register a business name if another business is already using it, or has one that's very similar. You must check the availability of your chosen name first.
This process can vary by state. Many states have online databases you can search to find out if another company has already registered the name you want to use. Some states require that you mail in a request to check name availability.
Reserving a Business Name
You can usually reserve the business name when you receive confirmation from your state that it's available for your use. Reserving the name establishes your intent to use it and prevents others from claiming it in the meantime.
Reserve a business name even if you don't plan to use it right away because the process is usually part of registering it with your state—it's a step you can get out of the way early on.
Business name reservations can be limited to a certain period of time. For example, you can reserve a business name in California for just 60 days, but it's 120 days for domestic corporations in New Jersey.
Check with your state business division, usually in the Secretary of State's office, to see how long a reservation lasts in your area.
When You Don't Have to Reserve a Business Name
You don't have to reserve your business name if you're planning to immediately file the required documents to start a corporation or form an LLC or other business entity. Filing of Articles of Incorporation for a corporation or Articles of Organization for an LLC serves the same purpose of registering your business name.
You should reserve your name if you don't plan to form your organization immediately, however, or if you aren't sure how long it will be before you file the documents to start your business.
You can also reserve a business name if your business doesn't have to register with the state, such as because it's a sole proprietorship.
Registering a Business Name
Reserving a business name isn't the same as registering one, and registration doesn't typically happen automatically. A business name registration is permanent.
Sole proprietors—and, in some states, partnerships—don't have to formally register a business with a state, but registering the business name protects you against another company using it.
Go to your state's Secretary of State's website to reserve or register a name. There will probably be a fee for registration.
Other State-by-State Requirements
Reserving a business name doesn't necessarily guarantee that the name will meet the requirements of your state for business entity names. For example, a corporation must include the words "Incorporated" or "Corporation" in many jurisdictions, or an abbreviation or variant of one of these words.
It's possible that you can reserve your name, only to find out that you can't register it because it doesn't meet the rules. Do a little additional research first to be sure.
The name you reserve might ultimately be rejected by the state during the formal filing process if it doesn't meet the state's specifications.
Don't Stop With Your State
Don't stop your research into the perfect business name just because your state has no record of a business name similar to the one you want to use. The name might be registered in another state, or it might be trademarked through the U.S. Patent and Trademark Office (USPTO).